Thursday, April 25, 2013

Suntrust Home Developers, Inc. (SUN) is run by Andrew Tan, which, as many of you already know, also runs AGI, MEG, ELI, and GERI.

There's a rumor circulating that SUN could be used as a backdoor for Travellers International Group (a joint venture between AGI and Genting Hong Kong, owners of Resorts World Manila and are also set to build the new Resorts World Bayshore).

Does this make any sense? My personal opinion: YES, it does. IPO is expensive, maintaining a listed company is also expensive, so it's a win win if Andrew Tan already owns a listed company that can be converted into a more profitable venture.

Conglomerates are now thinking of merging their property units, it's also possible that AGI is also thinking of merging its own property units MEG, ELI and GERI. Since SUN only has a small portfolio, it may be excluded from the merger.

If you look at SUN's history, however, you'll notice that it has a shady background before it became the SUN we know today. Before SUN changed its name in 2002, it was the controversial BW Resources (Symbol: BW). In 1999, its share price skyrocketed from P2 to P107 (5K% increase) when a rumor spread that Stanly Ho, a bigtime Macau casino operator, was investing in BW to build a Casino in the Philippines. Stanly Ho even made an appearance in the Philippines which further contributed to an increase in BW's share price.

The deal never went through and BW's share price plunged. According to PSE's investigation, it was stock manipulation through wash sales in which the buyer and the seller are the same to deceive investors that the stock is active and profitable. Allegedly, cronyism played a major role in this scandal. Dante Tan (Major shareholder of BW) and JV Ejercito were business partners and friends.

Today, the motive may be more legitimate, and the deal may more likely push through but who really knows? No one yet. As of writing, AGI is neither confirming nor denying it. Its latest disclosure is vague, stating that Traveller's Group is looking at both debt and equity market for its financing.

However, there's another twist to the story. Remember Stanly Ho? He still owns a chunk of overvalued shares in BW Resources which is now SUN. It is also possible that this is just a way out for him, jacking the price up for profit or just to get his investment back. Again, who knows! Either way, SUN's share price would go up.

CAVEAT! Just a personal opinion, there's no guarantee in this analysis. Agree or disagree? Share it in the comment section below :)

Thursday, April 18, 2013

Some of my previous picks last March 2013 already appreciated significantly. Today, I give another list of stocks which I believe have great potential.

First a disclaimer: What I'll write below is just my personal opinion. The state of market right now is very unpredictable, plus May is just around the corner (there is a saying "Sell in May and walk away!") so take these recommendations with utmost caution and analysts say we're still due for a major correction, but nobody knows for sure what will happen, so might as well put some of my money in my picks:

CPG
Century Properties already released its financials and at P2.04 per share, its P/E is at 10.7. I believe the stock is undervalued and may reward greatly if you hold it long term. The company is expected to earn P3B by 2015. I believe CPG is one of the "rising companies" of the Philippines.

EDC
If you can get this below P6.4 per share then I believe it's a good deal. Its sell down due to Bacman problem may be overly done, and at a technical point of view, the upside is great. But personally, I don't like the management of EDC, FGEN, LPZ and related companies... if you know what I mean.

AEV
Among the blue chips / companies in the PSE index, Aboitiz Equity Ventures has one of the lowest P/E of 12.5 at its current price of 54.3. One thing to note with Aboitiz companies is they are not very popular, I think they should do more PR and commercials for people to notice and invest in them.

VLL
Vista Land released its financials and its P/E is very low which means it's a very good deal. Warning though: This April, VLL's stock price already increased from P5.4 to P6.07 but even at P6.07 the P/E is 11.8, still relatively low so there's still opportunity to buy.

My strategy in this kind of market (very unpredictable) is to have 50% cash, and the other 50% I do averaging on my picks. E.g. buy 10% of my picks now, then if the price goes down significantly buy another 10% and so on. Maybe I'll allocate if stock prices go down in May or if there's a big correction.